Carly Wieland - Waipa District Council

Commissioner hearing for request for district plan change, variations
and Notices of Requirement for designations in respect of Waikato
Regional Airport proposed runway extension
Applicant and Requiring Authority:
Waikato Regional Airport Limited
Waipa District Council – Private
Proposed Plan Change No. 69 and
designation requirements
Waikato District Council – Proposed
District Plan Variation No.14
Hamilton City Council – Proposed
District Plan Variation No. 22
STATEMENT OF EVIDENCE OF CARLY WIELAND

1. INTRODUCTION
Qualifications and Experience
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1.1 My name is Carly Rose Wieland. I have a Bachelor of Business
degree majoring in Marketing and Public Relations from the
Queensland University of Technology. I currently run my own
independent consulting business called Strategic Energy Pty Ltd,
which was established in December 2009.
1.2 Strategic Energy Pty Ltd is a specialist aviation consulting business
targeting new airline route development, cooperative tourism
marketing campaigns, airport branding and positioning and airline
market intelligence and relationship development.
1.3 Currently, my clients include Hamilton International Airport, Cairns
International Airport, Mackay Airport, Gold Coast Airport, and Ballina
Byron Airport. Strategic Energy also subcontracts to Airbiz Aviation
Strategies where I work for numerous clients as part of the Airbiz
team.
1.4 Prior to establishing Strategic Energy Pty Ltd, I was employed as
General Manager Business Development and Marketing at
Queensland Airports for eight years. Queensland Airports Limited or
QAL, are the owners and operators of Gold Coast Airport, Townsville
Airport and Mount Isa Airport in Queensland, Australia.
1.5 I have 13 years experience in the aviation and tourism industries,
commencing my employment at Tourism Queensland (Queensland’s
State Statutory Tourism body) in market research and then
commercial aviation development. After building government and
airline contacts in this role as Tourism Advisor at Tourism Queensland,
I then entered the private sector at Gold Coast Airport as Business
Development and Marketing Manager. Gold Coast Airport was
expanded into a group airport business and I was then promoted to
General Manager Business Development and Marketing of all three

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airports as well as the QAL business. I was also a member of the
Executive Committee for three years at QAL, participating in the
development and ongoing management of the strategic direction of the
business.
1.6 The key aspects of my experience relevant to this case include;
tourism marketing, passenger forecasting, market research to identify
future target airline routes, and domestic and international airline
business development and airline negotiation (internationally I have
worked in Japan, China, India, Taiwan, Hong Kong, New Zealand,
Canada, Singapore, Malaysia, Macau and Thailand).
1.7 During my employment at Queensland Airports I was responsible for
attracting the first long-haul international business at Gold Coast
Airport from Air Asia X.
1.8 Specifically, the work I have completed since March 2010 with
Hamilton International Airport (HIA) has included the development of
targeted new route proposals and business cases for Jetstar, Pacific
Blue Airlines and Air Asia X.
Scope of Evidence
1.9 I have been asked to provide evidence on behalf of HIA in regard to
the appropriateness and relevance of the proposed runway extension
to 2,984m, particularly drawing on my experience at Gold Coast
Airport in building international flights. My evidence relates to my role
in developing and executing a business case for the Gold Coast
Airport runway extension which was later built and opended in May
2007 as well as attracting international flights from Tasman operators
and Asian long haul carriers (i.e. Air Asia X and Jetstar).
1.10 HIA has advised that an extension of the main runway is required so
that the following objectives can be met:

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• Attract long-haul airlines that land in Australia before picking up
trans-Tasman passengers and on-flying to New Zealand. This
is a growing market.
• Attract long-haul airlines flying directly from Asia to
New Zealand as an alternative to Auckland where there is
significant competition.
• Attract airlines operating cargo aircraft that require a longer
runway length to fully load their aircraft.
1.11 This evidence also briefly addresses the potential for increased cargo
business.
1.12 In my evidence I will:
a. Give a brief description of the history of passenger growth at
Hamilton International Airport (HIA).
b. Describe the market position of HIA, its key strengths and
characteristics as well as challenges. This will take the form of
a SWOT (‘strengths, weaknesses, opportunities, threats’)
analysis.
c. Outline what airlines look for in building a business case for a
new route and describe HIA’s relevant attributes.
d. Draw on my experience at Gold Coast Airport, a secondary
airport in Australia, and discuss the process undertaken at the
Gold Coast Airport to build a business case for international
flights and feedback at the time from airlines.
e. Describe the parallels between HIA and the Gold Coast Airport
relevant for this case (i.e. two secondary international airports
with a major hub within 75 minutes drive away).

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f. Confirm the importance of being prepared and having
approvals in place so HIA can realistically market itself to longhaul
airlines.
2. BACKGROUND AND THE PROPOSAL
2.1 Location wise, HIA is positioned in the heart of the Central North
Island in close proximity to many main tourist attractions of
New Zealand. Specifically, the airport is close to the North Island’s
major growth centres of Hamilton City and Tauranga City.
2.2 The Central North Island is one of the most popular visitor destinations
in New Zealand, attracting nearly one million international visitors per
annum.
2.3 Hamilton has been successfully marketed as an events venue as well
as being located in a “food bowl,” producing over $6 billion in food
products – milk, meat, vegetables and fruits.
2.4 Hamilton City is New Zealands fourth largest city and Tauranga is the
country’s fifth or sixth largest city, depending on the size criteria
chosen. Tauranga is one of the most prosperous regions in the
country, with a large wealthy retired demographic.
Historical Passenger Growth at HIA
2.5 For the financial year ending June 2010, the airport recorded total
passenger numbers of 332,545 passengers (16% international and
84% domestic passengers). Over the past five years, HIA has
recorded a slow decline in passenger numbers of -4%. This is
predominantly due to Air New Zealand pulling out of Trans-Tasman
flights.

Profile of Existing Airlines and Passengers
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2.6 Currently, two airlines operate to HIA including Air New Zealand
(domestic flights only) and Pacific Blue Airlines (international flights to
Brisbane, Australia).
2.7 Inbound Travel – Visitors
The major visitor markets to the Waikato region are (percentage
indicate total market share of international visitors):
• Australia 65%
• South East Asia 8%
• North Asia 6%
2.8 Outbound Travel – Residents
According to the 2006 Census, approximately 531,318 residents lived
within a two hour driving radius of Hamilton International Airport and
approximately 635,000 people lived within three hours drive from the
airport (not counting the Auckland population). Specific travel times by
local population are outlined in the following table:

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2.9 A research study called the Campbell Report was executed by HIA in
2008 to better understand the needs and travel desires of the local
residents of the HIA catchment area. Results of this report highlighted
that local residents within the HIA catchment have a high desire for
international travel. Specifically, 34% of respondents are interested in
travelling to a possible long-haul European destination from HIA and
32% of respondents are interested in international travel from HIA to
destinations in the Asia Pacific.
2.10 75% of the local residents want a low cost airline service and also
value cost and time as 62% of the reason for purchasing air-travel
2.11 Of those consumers, air tickets purchased online directly with the
airline accounted for 78% for domestic flights and 56% for
international flights. Furthermore, a more recent study conducted by
HIA in the local catchment area in 2010 measured the value locals

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placed on direct international services from HIA. Of the 1,200
residents surveyed, the majority of international travellers are
prepared to pay a premium to fly direct.
2.12 Cargo Potential – Brief outline of the current situation at HIA
HIA is ideally located for airfreight with high volumes of exported and
imported airfreight being trucked close to the airport on State
Highways 1 and 3.
Exported airfreight
• An estimated 40,000 tonnes per annum of airfreight for export
is trucked past the airport or produced locally;
• 30% of exported airfreight is destined for Asia.
Imported airfreight
• An estimated 70,000 tonnes per annum of imported airfreight is
trucked past the airport or used locally
• 37% of imported airfreight is from Asia (source: HIA).
Source: HIA outbound catchment
survey of those interested in
international
respondents)
travel, Jul10 (1,200
Most airfreight goes via Auckland Airport, with its location at the top of
the North Island most of the airfreight is then trucked around the
country.

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It is believed that over 90% of New Zealand’s airfreight goes via
passenger aircraft, with Emirates, Singapore Airlines, Air New Zealand
and Qantas dominating the market.
Currently, there is very limited freight shipped via HIA internationally
and in my opinion the Cargo market will only grow with the
introduction of additional international passenger flights.
2.13 Runway Limitations
The current runway length of 2,195 metres prohibits larger aircraft
including B787, A350, B777 and B747 operating direct from HIA to
Australia and Asia.
To correct this, HIA is proposing the following changes to the existing
runway:
• Construct a 789 metre sealed extension to the northern end of
the main runway (over the existing Runway End Safety Area)
consisting of a 610 metre sealed runway extension and a
188 metre sealed starter extension; and
• Form a new 240 metre RESA at the northern end of the
proposed runway extension and lengthen the RESA at the
southern end to 240m.
2.14 In September 2010, a detailed study of the required runway lengths to
operate to potential long haul markets with selected wide body aircraft
was commissioned by HIA. The report was completed by Astral
Aviation Consultants and was titled “Runway Length Requirements at
Hamilton International Airport”.
2.15 Consequently, the report recommended that the runway be extended
to a total sealed length of 2,984m, based on a 2,796m landing
distance and a 2608m takeoff distance. As set out in Mr Park’s

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evidence these distances are close to the minimum viable to
accommodate wide body aircraft operating direct to and from south
east Asian destinations or further afield, although with some payload
restrictions.
2.16 It enables the B747-400 and B767-300ER to carry a full passenger
load (but no freight) to SIN and the B777-200ER and A340-300 a full
passenger load to all south east Asian gateways, Shanghai, Japan
and the West Coast USA.
2.17 The main advantages of the runway length is that it:
• Enables the B747-400 and B767-300ER to operate with a full
passenger load to Singapore; and
• Provides the B787-9, B777-200ER and A340-300 a substantial
increase in freight capability to the established gateways of
Singapore and Hong Kong and the newly emerging gateway of
Shanghai.
3. CURRENT HIA MARKET POSITION
HIA Key Selling Attributes
3.1 Top tourism attractions in the Central North Island of New Zealand
include:
• Rotorua geothermal
• Waitomo caving
• Mt Ruapehu skiing
• Lake Taupo
• Bay of Plenty beaches
3.2 HIA is ready for international growth. It offers a competitive advantage
as a low cost alternative port to Auckland International. For an Air Asia

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X or similar airline, HIA could potentially offer the following
advantages:
• Attractive local tourism offerings and easy ground transfers to
Auckland, Taupo, Rotorua and the rest of the North Island; and
• Frequent and affordable domestic scheduling to Wellington and
Christchurch, as the gateway to the South Island;
• The ability to capitalise on the secondary status of HIA to
Auckland Airport, and attracting local and Auckland catchment
with AirAsia X’s motivational brand, pricing, destination offer;
• Not be faced with bilateral ‘push back’ from Malaysia or the NZ
Government as it is a secondary access point (ie. Currently
there are bilateral air service restrictions for other airlines
(besides Malaysian Airlines) to operate on the Kuala Lumpur –
Auckland route. This same restriction would not apply to HIA
as Malaysian Airlines does not currently operate there.); and
• Complement a split schedule with Christchurch International
Airport, offering potential for open-jaw North & South Island
itineraries. “Open-jaw” essentially means that passengers fly
into one port on arrival to New Zealand and may travel within
the country of New Zealand to many other destinations and
leave the country from a different port (e.g. fly in to HIA and
depart from Christchurch).
3.3 HIA SWOT Analysis
To accurately review HIA’s potential to attract international wide body
aicraft and long-haul airlines, I have completed a SWOT analysis
which is outlined below.
Internal • Cost advantages compared
to larger city airports
(operationally). Cost to
upgrade current facilities is
significantly less than other
Strengths Weaknesses
• All major international traffic
is going through Auckland
International Airport and
Christchurch Airport in the
South Island (except for

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international airports.
• The Central North Island is
a quality tourism destination
attracting over one million
visitors per annum.
• Proximity to a large
catchment area within a two
hour driving distance.
• Permanent customs,
immigration and quarantine
agencies.
• Flexible and efficient
terminal operation which
allows international flights to
be turned into domestic
flights without moving
aircraft.
• Simple terminal to facilitate
fast aircraft turnaround
times and improve on time
performance.
trans-Tasman traffic).
• HIA lacks the resources
structure to compete with
Auckland (i.e. lack of a
maintenance facility for large
aircraft and ground
equipment for wide body
aircraft)
• Business traffic is limited,
compared to Auckland.
• Limited ability for ‘hubbing’
of domestic traffic from
New Zealand onto long haul
flights to maximise load
factors.
• Limited brand awareness of
HIA as an international
airport within Asia.
• HIA does not have the same
quantity of duty-free
shopping and commercial
opportunities for passengers
compared to Auckland.
• Runway length currently too
short to facilitate long haul
wide body flights.
Opportunities Threats
External • Open jaw long haul
itineraries for South-East
Asian visitors (i.e. arrive HIA
and depart from CHC).
• Leverage off high brand
desirabilty of New Zealand
internationally.
• Position HIA as the LCC
airport of the North Island
and as an alternative to
Auckland.
• HIA’s ability to cater for
larger wide body aircraft.
• Aggressive marketing and
innovative business
practices to attract
additional sustainable
business.
• Auckland is significant as the
region’s main international
hub.
• Auckland has intentions to
construct a parallel runway
to greatly increase their
capacity to handle growing
international airline traffic.
• Some LCC airlines are still
focusing on building network
contribution and operating to
capital city ports.
• Airline ticket prices are likely
to continue to be much
cheaper ex Auckland and
this will continue to draw in
residents from the HIA
immediate catchment.

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3.4 Current Barriers to Growth for HIA
Auckland Airport continues to be the key barrier for HIA to grow longhaul
international airline capacity. This is predominantly due to its
existing brand presence in the market, established facilities, network
of domestic flights to feed international flights and their strong
marketing team. However, Gold Coast Airport also faced this fierce
competitive hurdle prior to establishing itself as an LCC airport and
winning long-haul business. Aggressive and targeted marketing will
be essential for HIA to maximise opportunities.
3.5 In summary, it is reasonable for HIA to have the objective of targeting
and attracting select long-haul airlines.
4. AIRLINE REQUIREMENTS FOR NEW ROUTE DEVELOPMENT
4.1 Airlines look for a selection of key ingredients for any new route
proposal to mazimise revenue and ensure there are no ‘opportunity
costs’ of operating elsewhere. In particular, the key ingredients
airlines have on their required list before commencing any new service
include:
• A reasonably large outbound population base which would
assist in sustaining daily services over a 12 month period with
both outbound leisure travel, business travel and visiting friends
and relatives (VFR) travel;
• A destination with a strong brand presence and attractive
tourism proposition to grow inbound visitor arrivals;
• Strong marketing support from the airport and local tourism
associations;

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• Operational efficiencies and capability (includes terminal
facilities, apron and runway capacity and ground support
businesses);
• Growth potential from key tourism attractions and a growing
population with a high propensity to travel;
• A mix of purpose of travel (i.e. leisure, VFR and business) in
both directions to maximise sustainability and revenue;
• Geographic position and destination ‘fit’ into the existing airline
scheduling network;
• Network to other ports for passenger feed;
• Airport charging incentives; and
• The ability to charge a mix of airfares to increase yield.
4.2 HIA does possess the majority of characterisitcs required for an airline
to make a positive decision to introduce new flights to the destination.
Weaknesses have already been discussed in the SWOT above,
however a runway length that does not allow you to attract long haul
airlines certainly would prohibit new long-haul flights.
5. GOLD COAST AIRPORT CASE STUDY
Background to the Gold Coast Airport (OOL) Passenger Growth
5.1 Gold Coast Airport successfully positioned itself as Australia’s Low
Cost Carrier Airport and undertook a targeted strategy with the
positioning of ‘unashamedly focused on leisure’.
5.2 Prior to the runway extension, Gold Coast was Australian’s 7th busiest
airport. In the 12 months to the end of September 2005, the airport
handled 3.35 million passengers – 21% more than for the previous
corresponding period. This was driven mostly by domestic growth of
20%, with Australia-originating traffic accounting for 92% of total
passengers. International traffic grew by 29% for the year ended
September 2005, to 279,514, but remained a relatively small

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component. The average load factor on international services was
62% at the time.
5.3 By comparison, for the year ended December 2010, Gold Coast
Airport exceeded five million passengers for the first time in a calendar
year, a result of a 12% increase on 2009. Gold Coast Airport’s
international passengers grew by 16%, with almost 800,000 of the
5.4 million total movements recorded in 2010 being international
passengers. Thus international passenger traffic now accounts for
15% of total passenger movements (up from 8% in 2005).
5.4 Prior to the runway extension being completed, Gold Coast Airport
needed to overcome two major obstacles:
a. Proximity to a large international airport at Brisbane.
b. Serious scepticism in both the aviation and tourism industry that
Gold Coast Airport could become a long-haul international
airport due to the established international credentials of the
larger Brisbane International Airport 75 minutes drive away.
5.5 A focused strategy and brand awareness raising campaign was
executed two years prior to the build of the runway extension. In
negotiations with airlines, it became crystal clear that without the
actual runway extension being operational, no airline would commit to
flying to the Gold Coast.
OOL Position in the market pre and post runway extension
5.6 Coupled with facility constraints, the most crucial barrier to
international growth in the long haul and Asian market, was the
previous runway length. In 2006, Gold Coast Airport (OOL) had the
shortest runway in Australia (see chart below). This put OOL at a
competitive disadvantage within Australia and did not allow wide body
aircraft from Asia to arrive and depart with non-stop flights.

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5.7 Essentially, without the runway built, Gold Coast Airport could not
seriously market itself to target airlines. Airlines needed to be
confident that OOL would have the infrastructure in place before they
would commit to commencing new flights based on the large
investment and lead-in time for new routes. Lead-in time refers to not
only airline ticket sales, but the marketing and development with the
travel distribution networks which sell a great percentage of seats on
behalf of the airline in Asian markets. It was considered too great a
risk on the airlines part to commit to a new route without the runway
complete, as the embarassment and cost of cancelling pre-sold
holiday packages was too great.
Sydney
Mel bour ne
Br i sbane
Per th
Adel ai de
Cair ns
Gol d Coast
Canber r a
Dar wi n
Hobar t
Townsville
Alice Springs
Runway Lengths For Top 12 Australian Airports
0 500 1000 1500 2000 2500 3000 3500 4000
5.8 Thus in order to plan for maximum future potential of the OOL, an
approval was sought and granted by the Federal government in
November 2004 to extend the Gold Coast Airport runway from 2,042m
to 2,500m. This extension would enable existing aircraft types using
the airport and larger aircraft (up to B777/A330 and the B787 aircraft
types) to operate to North Asia non-stop. However, before the board
of GCAPL approved the construction of this runway and necessary
terminal developments to facilitate long-term international and
domestic traffic, a detailed feasibility study was commissioned to
analyse the true international demand potential for the Gold Coast.
CAPA Consulting was chosen as the most industry relevant

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consultancy at the time to assist GCAPL with this task. The results of
the feasibility study were used to forecast future international demand
and model revenue targets for the business.
5.9 The initial report from CAPA Consulting focused heavily on the
negative aspects of aggressive competition from Brisbane Airport and
recommended a smaller number of opportunities than previously
perceived by OOL management. However, this report did serve as an
excellent ‘reality check’ on ambitions of OOL management and
outlined specific target market characteristics which would later assist
OOL in selecting specific airlines and markets to lobby. OOL then
developed a strategy taking onboard a selection of recommendations
from CAPA Consulting and OOL’s own internal research and market
intelligence.
5.10 Gold Coast Airport then developed a five year international marketing
plan with key action points which were staged to meet realistic
objectives over the five year period.
5.11 Furthermore, Gold Coast Airport avoided targeting airlines which were
currently serviced by Brisbane Airport.
5.12 In terms of positioning the airport in the international air services
environment, OOL promoted itself as the secondary low cost airport in
South East Queensland and Northern New South Wales and
succinctly used the marketing communication tagline of ‘Australia’s
Lowest Cost International Airport’. This proved to be a successful
marketing exercise.
How OOL marketed itself to international airlines
5.13 Gold Coast Airport promoted itself very clearly with a single and
continuous message both within Australia and overseas. OOL
communicated its key benefits as:
• Low cost compared to capital city airports – Australia’s lowest
cost international airport.

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• Right in the heart of the Gold Coast & Northern New South
Wales high demand and high volume tourist destinations.
• A large outbound catchment area of one million persons –
especially compared to other regional centres.
• Marketing incentive focus – sustainable demand was the
priority.
• Partnership approach with tourism operators.
• Open skies. No bilateral air service restrictions compared to
capital city ports in Australia (due to the regional entitlements
package available to foreign countries as part of the Australian
Government’s International Air Service negotiations).
• Airlines can develop a point of difference to competitors.
• Simple operation (no aerobridges).
5.14 Specifically, the benefits the runway extension would provide for OOL
which were put forward as a business case at the time to the OOL
board were as follows. The runway extension:
a. Provides existing aircraft with a much improved flight distance
(i.e. B737-800 flying Perth and Darwin, B767-300 to Japan and
Singapore and a B787 to the West Coast of the US.).
b. Allows new code E type aircraft to operate from the airport.
c. Will broaden the aviation market that Gold Coast Airport can
attract.
d. Will ensure Gold Coast Airport will not be restricted to domestic
and New Zealand growth in future.
e. Provides an economic benefit to the surrounding region and will
generate both direct and indirect employment.
f. Will provide an increase in the number of flights and
destinations serviced.
g. Will provide an increase in the micro economic activity at the
airport (retail, rental cars, car parking etc).
h. Will further develop the value of the Airport asset.

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6. PARALLELS BETWEEN HIA AND OOL
6.1 The obvious parallels between the current HIA situation and the
previous OOL situation include:
• Large capital city airport within 75 minutes drive away;
• Majority of traffic is/was domestic traffic;
• A great deal of criticism was received and skepticism from
‘knockers’ in the industry that Gold Coast Airport should just
focus on domestic and leave the ‘big international business’ to
Brisbane Airport;
• Low airline awarenss of Gold Coast Airport as a serious
international player in the Asia Pacific market existed and a
focused and aggressive lobbying strategy had to be employed
and executed over three years to raise the airport brand and
market position;
• Gold Coast Airport needed an airline partner to make the ‘first
move’ to establish itself as a serious international airport for
long-haul flights. This partner was Air Asia X followed by
Jetstar;
• Both OOL and HIA have a large local population for outbound
travel which is required for the airlines;
• OOL was extremely active in working with their local tourism
authority, Gold Coast Tourism ;
• Furthermore, OOL needed the support of Tourism Queensland
to reinforce the airports market position. This is something HIA
will also need to have before actively engaging international
airlines.
• Both airports started with Trans-Tasman traffic only which
enabled the establishment of Customs, Immigration and
Quarantine facilities. This was certainly a factor in attracting
international long-haul airlines to OOL.

7. CONCLUSIONS
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7.1 The ultimate goal is to ensure HIA has a risk-averse strategy which
will maximise opportunities for sustainable revenue growth into the
future.
7.2 Auckland will continue to provide aggressive competition for long-haul
international flights and thus it is vital for HIA to position itself uniquely
in the international aviation and tourism market and offer a competitive
advantage as a secondary airport.
7.3 Airlines are unlikely to commit to commencing new services without
the appropriate infrastructure (i.e. runway length) in place.
7.4 In my professional opinion, it is reasonable for HIA to be marketing
itself in the long-haul market space to target the following type of flight
operations:
a. Attracting flights triangulating over Australia to Asia (for
example, Japan and China over Gold Coast to HIA).
b. Attracting direct flights from Asia in the medium to long term.
This opinion is based on the size of the catchment area, growth
potential for international tourism into the Waikato and Central North
Island region and benefits a secondary international airport can offer
airlines if marketed correctly.
7.5 Aviation is a long-term growth industry and airports need to have
approvals in place well in advance of market trends to ensure they are
‘market ready’ when the relevant opportunities arise.
Carly Wieland
16 February 2011